Forum participants were encouraged to consider appraisal rights in
June 2013 as a means of realizing the same long term intrinsic
value that the company's founder and private equity partner sought
in an opportunistic market-priced buyout, and
legal research of court
valuation standards was commissioned to support the required
investment
decisions.

Each of the Dell shareholders who chose to rely upon the Forum's
support satisfied the procedural requirements to be eligible for payment
of the $17.62 fair value, plus interest on that amount compounding since
the effective date at 5% above the Federal Reserve discount rate.

Note: On December 14, 2017, the
Delaware Supreme Court
reversed and remanded the
decision above, encouraging reliance upon market pricing of the
transaction as a determination of "fair value." The Forum
accordingly
reported that it would resume
support of marketplace processes instead of
judicial appraisal for the realization of intrinsic value in
opportunistically priced but carefully negotiated buyouts.

For an example of a board's
failure to effectively address the evolving investor views of fair pricing
reported in the article below, see

Friendly deals and hostile
takeovers have been part of the Wall Street deal landscape for decades. But
recently a hybrid is emerging in which friendly deals face hostility—from
shareholders demanding more money.

In what has become a new sort of
takeover battle, shareholders are shaking up deals, demanding higher prices
for their companies even when no better bid is guaranteed.

Amid this shareholder agitation,
would-be acquirers recently have been compelled to bump up or otherwise
improve their offers in several big deals, including the pending leveraged
buyout of
Dell Inc. and
Deutsche Telekom AG's deal for U.S. wireless carrier MetroPCS
Communications Inc.

"It used to be that you'd pop the
champagne corks upon a deal announcement. Now you white-knuckle it through
the shareholder vote," said Chris Young, who heads the so-called
contested-situations practice for Credit Suisse Group AG, which focuses on
activist investors.

Boosting Bids

Mr. Young has a name for
situations where it is the shareholders, not the buyers or sellers, who are
unhappy: the "contested-friendly deal."

Investors' stronger pushback on
mergers and acquisitions is the latest manifestation of the broader rise of
shareholder activism, in which investors typically agitate for changes to
increase share prices through moves ranging from operational tweaks to
selling the entire company. Recent post-merger-agreement skirmishes with
investors have involved both longtime shareholders and shareholders who
snapped up a stock after a deal was struck and then pushed for a better
price.

The rise of activism around deals
adds another risk factor for chief executives and boards when weighing
whether to sign a deal, and it could mean companies shy away from deals or
take additional steps—such as more thoroughly seeking a wider swath of
buyers—to help ensure the deal gets done.

For shareholders, the trend could
mean bigger payouts when companies are sold but also may mean fewer deals
get struck.

"One thing is certain:
Shareholder approval in the absence of an interloper can no longer be taken
for granted," said Ken King, a deal lawyer at Skadden, Arps, Slate, Meagher
& Flom LLP.

Concerned about shareholder
reaction, companies are doing more before a deal is signed to pre-emptively
gauge the composition of their shareholder base and investors' likely
response to an agreement, bankers and deal lawyers say.

Once a deal is struck, firms
reach out quickly to investors, rather than wait until closer to the time of
the shareholder vote, they say.

"Boards of directors and
management teams are becoming more and more mindful of the need to 'sell' a
deal from the outset of its announcement," Mr. King said.

Deal makers say they also are
weighing different tactics to head off shareholder opposition.

Among them: cutting some deals
where buyers go directly to shareholders to buy shares through "tender
offers," rather than striking a deal that requires the company being sold to
make a public filing that details negotiations and rationale for a deal,
followed by a shareholder vote.

A change in Delaware law that
went into effect Aug. 1 also will make it easier for firms to execute
all-cash deals through a tender offer.

Companies can now sell themselves
through a tender offer if more than half of shareholders agree to sell their
shares; previously the law required that 90% sign off. The approach wouldn't
work in deals that require extra time to clear regulatory hurdles or secure
financing because tender offers must be done in a short time frame.

Investors have prodded buyers
into richer offers in years past in the absence of a competing bid. And some
deals that have faced shareholder resistance this year have distinguishing
features that made them ripe for opposition. The Dell deal, for instance,
involves a management buyout, an often contentious move.

At the same time, some deal
makers say, agitation by shareholders in a string of several big deals along
with the rise of activism broadly have chief executives, their boards and
advisers taking notice.

And some don't mind what they
see. Executives and directors are beginning to change their views on
shareholder resistance to deals, seeing it as less of a problem than it used
to be, said Paul Parker, head of global corporate finance and M&A for
Barclays PLC.

Boards are "putting a deal out
there and letting the shareholders decide," Mr. Parker said. "They are
willing to say, 'If it gets attacked and someone can create a higher value,
that's OK.'"

After Clearwire Corp. agreed in
December to be sold to then
Sprint Nextel Corp., now known as Sprint Corp., for $2.97 a share for
the shares Sprint didn't own, investment firm Crest Financial Ltd. came out
against the deal. Sprint also faced a challenge from pay-TV provider Dish
Network Corp., which topped Sprint's offer, eventually offering $4.40 in a
tender offer. Clearwire came out in support of that offer, then Sprint
eventually agreed to pay $5 a share for Clearwire, an increase of $1.2
billion over the initial bid.

Mr. King said that since no
recent deal has collapsed after shareholders agitated for a higher price,
shareholders are emboldened to push for more.

Greeting-card company
American Greetings Corp. also encountered shareholder resistance in its
plan to sell the company to its controlling family. TowerView LLC, a fund
run by former Salomon Brothers executive Daniel Tisch, argued that the Weiss
family—descendants of the Polish immigrant who founded American Greetings in
the early 1900s—should buy back shares to improve the company's stock price,
rather than take the company private, as they proposed last September.

TowerView said in public filings
that the company could be worth close to $29 a share, versus the $17.18 the
family first offered to pay for the portion of the company it doesn't
already own.

The Weiss family eventually
raised its offer to $19 a share, a bump of around $80 million. TowerView
remained opposed to the deal at the higher price. Investors "want to make
sure they are getting a fair deal," Mr. Tisch said earlier this week.

This project was conducted as part of
the Shareholder Forum's public interest program for "Fair
Investor Access," which is open free of charge to anyone
concerned with investor interests in the development of
marketplace standards for expanded access to information for
securities valuation and shareholder voting decisions.
As stated in the
posted
Conditions of Participation, the
Forum's purpose is to provide decision-makers with access to
information and a free exchange of views on the issues
presented in the program's
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participant is expected to make independent use of
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privacy rights of other participants. It is a Forum
rule that participants will not be identified or quoted
without their explicit permission.

The management of Dell Inc. declined the
Forum's invitation to provide leadership of this project,
but was encouraged to collaborate in its progress to assure
cost-efficient, timely delivery of information relevant to
investor decisions. As the project evolved, those
information requirements were ultimately satisfied in the
context of an appraisal proceeding.

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